LETTER FROM THE PRESIDENT OF VG GOLD CORP.
November 11, 2010
Dear Shareholder:
The Board of Directors cordially invites you to attend the special meeting of shareholders of VG Gold Corp. (“VG
Gold”) to be held at 11:00 am (Toronto time) on December 13, 2010 at the Sheraton Toronto, Huron Conference Room,
123 Queen Street West, Toronto, Ontario M5H 2M9 (the “Special Meeting”).
At the Special Meeting, shareholders of VG Gold will be asked to consider and, if deemed advisable, to pass a special
resolution approving a plan of arrangement pursuant to Section 182 of the Business Corporations Act (Ontario) (the
“Arrangement”) pursuant to which VG Gold and Lexam Explorations Inc. (“Lexam”) will amalgamate to form a new
corporation to be called Lexam VG Gold Inc. (“Lexam VG”), such that holders of common shares of VG Gold (each, a
“VG Gold Share”) will become holders of common shares of Lexam VG (each, a “Lexam VG Share”) on the basis of 1
Lexam VG Share for each VG Gold Share held, and holders of common shares of Lexam (each, a “Lexam Share”) will
become shareholders of Lexam VG on the basis of 2.1 Lexam VG Shares for each Lexam Share held. In addition, you
will be asked to consider, and if deemed advisable, to pass an ordinary resolution approving a private placement
financing of $5 million by Robert R. McEwen, current Chairman of Lexam, in units of Lexam at a price of $1.008 per
unit of Lexam based on the net asset value of Lexam shares on the day immediately preceding the announcement of
the Transaction, each unit consisting of one Lexam Share and one-half of one Lexam Share purchase warrant, with
each full warrant entitling the holder to purchase one Lexam Share at a price of $2.10 per share for a period of two
years following the closing of the private placement (the “Transaction”).
The Board of Directors of VG Gold, based in part on the unanimous recommendation of the Special Committee of the
Board of Directors created to consider the Transaction (the “VG Gold Special Committee”), has determined that the
Transaction is fair to shareholders of VG Gold and that the Transaction is in the best interest of VG Gold and
recommends that shareholders of VG Gold vote in favour of the Transaction.
The recommendation of the VG Gold Special Committee and the Board of Directors is based on various factors,
including the opinion of Mackie Research Capital Corporation (“Mackie”), Financial Advisor to VG Gold, to the effect
that, as of the date of such opinion and subject to the assumptions, limitations and qualifications set forth in the
opinion, the consideration of 1 Lexam VG Share for each VG Gold Share to be received by VG Gold Shareholders
pursuant to the Arrangement for each VG Gold Share held is fair, from a financial point of view, to shareholders of VG
Gold.
To be effective, the Arrangement must be approved by a resolution passed by 66⅔% of the votes cast by shareholders
of VG Gold at the Special Meeting as well as by a majority of the votes cast by shareholders of VG Gold at the Special
Meeting, excluding shares held by Lexam and any related parties. The Arrangement is also subject to certain
conditions, including approval by shareholders of VG Gold of the private placement and the approval of the Ontario
Superior Court of Justice.
The accompanying Notice of Special Meeting and Management Information Circular provide a full description of the
Transaction and include certain additional information relating to the completion of the Transaction to assist you in
considering how to vote on the Transaction. You are encouraged to consider carefully all of the information in the
accompanying Management Information Circular including the documents incorporated by reference therein. If you
require assistance, you should consult your financial, tax, legal or other professional advisors.
The Private Placement requires approval by a resolution passed by a majority of votes cast by shareholders of VG Gold
at the Special Meeting, excluding shares held by Lexam and any related parties. The Private Placement is conditional
on shareholder approval of the Arrangement.
Please contact Kingsdale Shareholder Services Inc. at 1-888-518-1565,
if you have any questions, or require assistance completing your Proxy
Your vote is important regardless of the number of VG Gold Shares you own. If you are a registered holder of VG
Gold Shares, we encourage you to take the time now to complete, sign, date and return the enclosed form of proxy by
not later than 11:00 am (Toronto time) on December 9, 2010, to ensure that your VG Gold Shares will be voted at the
Special Meeting in accordance with your instructions, whether or not you are able to attend in person. If you hold
your VG Gold Shares through a broker or other intermediary, you should follow the instructions provided by your
broker or other intermediary to vote your VG Gold Shares at the Special Meeting.
Subject to obtaining court approval and satisfying all other conditions of closing, including obtaining the approval of
VG Gold’s shareholders, it is anticipated that the Transaction will be completed by December 31, 2010.
If you have any questions relating to the Transaction, please contact David Black, Manager of Investor Relations for VG
Gold at (416) 368-0099 ext. 4050 and, for European shareholders, Maurice Hoewler at + 49 40 5544 6945 or please
contact Kingsdale Shareholder Services Inc. by telephone at 1-888-518-1565 toll free in North America or (416) 867-
2272 outside of North America or by email at contactus@kingdaleshareholder.com.
I would like to thank all shareholders for their continued support.
Yours very truly,
(Signed) “Thomas W. Meredith”
Thomas W. Meredith
President and CEO
VG GOLD CORP.
65 Queen Street West, Suite 520
Toronto, Ontario M2H 2M5 Canada |
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